DoD's $23M advertising contract awarded to Campbell-Ewald Company for media services

Contract Overview

Contract Amount: $23,000,000 ($23.0M)

Contractor: Campbell-Ewald Company

Awarding Agency: Department of Defense

Start Date: 2009-09-24

End Date: 2010-09-23

Contract Duration: 364 days

Daily Burn Rate: $63.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: BASE PERIOD - SPACE CHARGES, MEDIA

Place of Performance

Location: WARREN, MACOMB County, MICHIGAN, 48093

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $23.0 million to CAMPBELL-EWALD COMPANY for work described as: BASE PERIOD - SPACE CHARGES, MEDIA Key points: 1. The contract value appears reasonable for a one-year base period of advertising services. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract type is Firm Fixed Price, which transfers risk to the contractor. 4. The duration of 364 days is standard for a base period. 5. The North American Industry Classification System (NAICS) code 541810 indicates advertising agencies. 6. The award was made by the Department of the Navy, a component of the Department of Defense.

Value Assessment

Rating: good

The base period value of $23 million for advertising services is within a typical range for government contracts of this nature. Benchmarking against similar advertising contracts awarded by the Department of Defense or other federal agencies would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that the contractor bears the financial risk for cost overruns, which is generally favorable for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of four bidders (no) suggests a healthy level of competition for this advertising services requirement. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: Taxpayers benefit from a competitive process as it is likely to drive down costs and ensure the government receives a fair market price for the advertising services procured.

Public Impact

The primary beneficiaries are the Department of Defense and its various branches, receiving advertising and media services. The services delivered include advertising campaigns and media placement to support military recruitment and public awareness efforts. The geographic impact is national, as advertising campaigns typically have broad reach. Workforce implications are primarily within the contractor's organization, Campbell-Ewald Company, and potentially within media outlets where advertising is placed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if the initial requirements are not clearly defined.
Reliance on a single contractor for a significant advertising budget could lead to complacency.
Effectiveness of advertising campaigns can be difficult to measure definitively.

Positive Signals

Firm Fixed Price contract type mitigates cost overrun risk for the government.
Full and open competition suggests a robust selection process.
The contractor, Campbell-Ewald, has a history of large-scale advertising work.

Sector Analysis

The advertising industry is a significant sector within the broader professional services market. Government contracts for advertising are common, supporting various agency missions from recruitment to public information campaigns. The market size for advertising services is substantial, with federal spending representing a portion of the overall industry revenue. This contract fits within the government's need for strategic communication and outreach.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the nature and potential value of the services, it is unlikely that significant subcontracting opportunities for small businesses would be mandated unless specified by the agency. The primary focus of this award appears to be on large-scale advertising capabilities.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Department of the Navy. Accountability measures would be tied to the performance work statement and delivery schedules. Transparency is generally maintained through contract award databases, though specific campaign performance metrics may not always be publicly disclosed.

Related Government Programs

Department of Defense Advertising and Public Affairs Contracts
Federal Media Buying Services
Government Recruitment Advertising

Risk Flags

Potential for campaign ineffectiveness
Adherence to advertising regulations and ethical standards
Efficient use of taxpayer funds

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.0 million to CAMPBELL-EWALD COMPANY. BASE PERIOD - SPACE CHARGES, MEDIA

Who is the contractor on this award?

The obligated recipient is CAMPBELL-EWALD COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $23.0 million.

What is the period of performance?

Start: 2009-09-24. End: 2010-09-23.

What is the historical spending pattern for advertising services by the Department of the Navy?

Historical spending data for advertising services by the Department of the Navy would reveal trends in contract values, types of services procured, and primary contractors over time. Analyzing this data can help benchmark the current $23 million contract against past expenditures. For instance, if the Navy has consistently awarded similar-sized contracts for advertising over the past decade, it suggests this award is in line with historical norms. Conversely, a significant deviation might warrant further investigation into the reasons for the change, such as increased campaign scope, evolving media landscapes, or shifts in strategic priorities. Understanding these patterns provides context for assessing the reasonableness of the current contract's value and scope.

How does the performance of Campbell-Ewald Company on previous government contracts compare to industry standards?

Assessing Campbell-Ewald's performance on previous government contracts requires access to performance evaluations, such as Contractor Performance Assessment Reporting System (CPARS) data. A review of these reports would indicate their track record in terms of quality, timeliness, cost control, and overall customer satisfaction. Comparing these ratings to industry benchmarks or the performance of other large advertising firms that contract with the government would provide insight into their reliability and effectiveness. Positive CPARS ratings and a history of successful project completion would suggest a lower risk associated with this new award. Conversely, any documented performance issues could raise concerns about the contractor's ability to meet the requirements of this $23 million contract.

What specific advertising metrics are used to measure the success of this contract?

The success of this advertising contract is likely measured through a combination of quantitative and qualitative metrics, depending on the specific objectives of the campaigns. Quantitative metrics could include reach, frequency, impressions, click-through rates (for digital advertising), cost per acquisition (CPA), and return on ad spend (ROAS). Qualitative metrics might involve brand awareness surveys, message recall studies, and sentiment analysis. The contract's performance work statement (PWS) would detail the Key Performance Indicators (KPIs) and the methodology for tracking and reporting on these metrics. Effective measurement is crucial for demonstrating the value derived from the $23 million investment and for informing future advertising strategies.

What is the typical duration and value range for similar advertising contracts awarded by federal agencies?

The typical duration for federal advertising contracts can vary significantly, but base periods often range from one to five years, with options for extensions. The value range is equally diverse, heavily influenced by the scope of services, the agency's mission, and the target audience. Contracts for broad recruitment campaigns or public awareness initiatives can easily reach tens of millions of dollars, as seen with this $23 million Department of the Navy award. Smaller, more targeted campaigns might be in the low millions or even hundreds of thousands. Benchmarking this contract against others with similar objectives (e.g., recruitment, public service announcements) and from comparable agencies (e.g., other branches of the military, large federal departments) provides essential context for evaluating its size and duration.

Are there any known risks associated with the advertising services procured under this contract?

Potential risks associated with this advertising contract include the effectiveness of the campaigns in achieving their intended goals (e.g., recruitment, public perception), the accuracy and appropriateness of messaging, and the efficient use of taxpayer funds. There's also a risk related to the evolving media landscape, where strategies that are effective today might become obsolete quickly. Furthermore, ensuring compliance with advertising regulations, ethical standards, and appropriation laws is critical. The firm fixed-price nature of the contract helps mitigate financial risks for the government, but the risk of underperforming campaigns remains a key concern that requires diligent oversight and performance monitoring.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Advertising, Public Relations, and Related Services › Advertising Agencies

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0018908RZ039

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Interpublic Group of Companies Inc (UEI: 006985790)

Address: 30400 VAN DYKE AVE, WARREN, MI, 10

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $23,000,000

Exercised Options: $23,000,000

Current Obligation: $23,000,000

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018909DZ040

IDV Type: IDC

Timeline